Owners of Internet sweepstakes businesses fight to stay alive after state court ruling

Published: Saturday, December 22, 2012 at 04:13 PM.

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“I thought, ‘Hey, I could do this,’” he said of owning such a business.

Bullis said he realized the move was a gamble in itself. The state put the clamps on Internet gaming in 2010 — legislators passing a law against such businesses. Backers of the games countered with the legal case the N.C. Supreme Court settled last week.

“I knew there was a risk,” Bullis said. “I never dreamed it’d materialize.”

He doesn’t like to read articles that refer to the sweepstakes business as “gambling.” Bullis said his customers merely purchase Internet time, then do with it what they wish. Most, he admitted, play games where they can win cash — as much as hundreds or (on extremely rare occasions) thousands of dollars.

Winnings, say proponents of Internet cafes, are predetermined.

Bullis said he’s mystified by the backlash against businesses such as his.
Haw River
has among the lowest taxes of any local municipality on the games, but Bullis said he still pays a fee of $250 on each of his 99 machines.

Bullis said he’s always been well-received by officials with the town of
Haw River
, but others say that’s not true of how gaming businesses have been welcomed in some local municipalities.

HAW RIVER — Ernest Moore said if he could tell state legislators one thing, it’d be simple.

“I’d tell them they’ve got better things to do than stop people from having a good time,” he said.

Moore frequents Village Marketplace Sweepstakes on West Main Street in Haw River. It’s in the VillageMarketplaceShopping Center off North Church Street. Moore goes to the sweepstakes cafe an average of twice a week, he said.

His investment in gaming isn’t big, Moore said — no more than $40 a week. He said he’s never won much in the sweepstakes, either — his top prize never topping $100.

Still, Moore likes it, as much for the camaraderie of the establishment as anything.

“It’s very, very entertaining and fun, too,” he said. “It’s like fishing — it gives me the chance to get out of the house and socialize.”

If the state has its way, Moore’s fun and the fun of thousands like him across the state may soon be coming to an end. Recently, the N.C. Supreme Court overturned lower court rulings that favored the Internet sweepstakes industry. The move reinstates North Carolina’s laws against the businesses and upholds a previous ruling that sweepstakes halls are gambling operations.

This past week, the likelihood of the sweepstakes parlors being closed increased dramatically after the state’s highest court refused a request from industry officials to delay closings while they appeal to the U.S. Supreme Court. The refusal could close within weeks hundreds of businesses across North Carolina, including numerous establishments in Alamance and Guilford counties.

Industry officials said they don’t expect the ruling to be enforced for at least two weeks, until it becomes final.

STATE OFFICIALS and others claim sweepstakes gambling is a problem that inordinately affects those who can afford it the least — families on the lower end of the socio-economic scale. They say it leads to domestic problems and serves no productive societal purpose.

Backers of Internet gaming counter that it’s no worse or more addictive than the state-run N.C. Education Lottery.

For the moment, what becomes of Internet sweepstakes parlors is unclear. Will it be police raids similar to those once staged at illicit video-poker sites?

Who knows? Law enforcement officers contacted seemed as perplexed as anyone as to the fate of Internet gaming cafes. Alamance County District Attorney Pat Nadolski predicted further legal wranglings.

Don Bullis, the owner of Village Marketplace Sweepstakes, said he doesn’t know how it will play out.

“If we’re stopped, there’s going to be a lot of people out of work,” he said.

Bullis bought Village Marketplace Sweepstakes in June. The business had been home to an Internet café prior to his purchase and Bullis admitted the property “left a lot to be desired.” He straightened the place up considerably.

Bullis paid to have the building gutted and rebuilt — repainting everything and installing new carpet, ceiling fans and expensive light fixtures. Bullis said he’s got almost $350,000 invested in the property that he’s expanded from 2,200 square feet to about 4,200 square feet.

“I cleaned it up and business started to increase,” Bullis said. “It grew so quickly, it swept me off my feet.”

Customers at Village Marketplace Sweepstakes are fiercely loyal — both to the business and one another. They come across more as family members than clientele that merely frequent a shared business. When they walk in the door, they’re greeted — both by fellow customers and employees.

The sweepstakes shop looks nice — nothing about it coming across as a shady establishment. Anyone who steps inside is welcome to free soft drinks and coffee. The sale of alcohol is banned from Internet cafes and Bullis said he wouldn’t offer it even if legal.

The majority of Village Marketplace Sweepstakes is open to smokers, but there’s a game room where smoking is prohibited. Walls are decorated with portraits of Hollywood legends as well as a photo of President Kennedy and his wife. One room is “The Carousel Room” — its walls adorned with paintings of merry-go-rounds.

“I’ve never had to call the police, never had a fight,” Bullis said. “I’ve never had shouting, never had a confrontation between a male and a female. I challenge the government to compare my business to establishments that serve alcohol.”

Of his customers, Bullis said: “They come for relaxation … whatever.”

BULLIS, 69, who has a background in the service industry, said he got involved in Internet sweepstakes after suffering a serious fall and injury in December 2010. He had trouble walking and said during recuperation his doctor advised him it’d do him good to get out of his house more often. Bullis began visiting a sweepstakes café in Burlington.

“I thought, ‘Hey, I could do this,’” he said of owning such a business.

Bullis said he realized the move was a gamble in itself. The state put the clamps on Internet gaming in 2010 — legislators passing a law against such businesses. Backers of the games countered with the legal case the N.C. Supreme Court settled last week.

“I knew there was a risk,” Bullis said. “I never dreamed it’d materialize.”

He doesn’t like to read articles that refer to the sweepstakes business as “gambling.” Bullis said his customers merely purchase Internet time, then do with it what they wish. Most, he admitted, play games where they can win cash — as much as hundreds or (on extremely rare occasions) thousands of dollars.

Winnings, say proponents of Internet cafes, are predetermined.

Bullis said he’s mystified by the backlash against businesses such as his. Haw River has among the lowest taxes of any local municipality on the games, but Bullis said he still pays a fee of $250 on each of his 99 machines.

Bullis said he’s always been well-received by officials with the town of Haw River, but others say that’s not true of how gaming businesses have been welcomed in some local municipalities.

IN AUGUST, members of the Graham City Council imposed much stricter guidelines on new Internet sweepstakes businesses looking to move to town — including restrictions on how closely they can open to everything from schools to parks.

In May, Burlington City Council members upped the fee they charge for gaming machines to $2,500 for the first terminal at a café and $1,000 for each additional one. Previously, business owners were charged $25 for every four terminals.

“I think singling out an industry like this is just not right,” Jerry Stewart, the owner of Interstate Sweepstakes on Ramada Road, said at the time.

Bullis said he feels the same. He noted his business has done much for the community. A donation box at the register with proceeds earmarked for Christmas Cheer of Alamance County is filled with dollar bills. Bullis tossed in a check for $1,000 from the business.

He looks out for his 10 employees. When Bullis decided to have a Christmas meal for them, he did two — one at lunch and another at dinner to make sure everyone involved in keeping the business open 24 hours a day could attend.

On the other side of Burlington, Brad Hall, the owner of GlenRavenBusinessCenter at the intersection of West Webb Avenue and West Davis Street, said Internet cafes give more back to the community than people realize. He said he and his customers provided Christmas presents for a needy family that would have otherwise done without.

“We’re trying to put a positive spin on it,” Hall said of the gaming industry. “We do a lot of good.”

He said police have been called to his establishment only once since he opened in June 2011. That occurrence, Hall said, was for help when there was a bump-up of cars in the parking lot.

“There are bigger fish to fry,” Hall said of the courts looking to close down gaming industries like his.

He said his customers come to the business as much for the chance to talk to others as try and win Internet games.

“These are people who’d be sitting at home watching a movie if they weren’t here,” Hall said. “It’s a form of socialization.”

BACK AT Village Marketplace Sweepstakes, Trent Chrisp, one of the employees, said he’s got something to tell the courts and legislators if they close his place of employment.

“I won’t be able to pay my bills,” he said.

Meanwhile, Bullis wondered aloud if the money he’s paid in taxes will be refunded if he’s closed. He said he paid $13,500 in taxes for new machines just last week.

Bullis said he worried his speaking out about the merits of the gaming industry and questioning those seeking to shut him down might make him a target if those closures come to fruition. He said if he’s ordered to close, he’ll close, and said the last thing he wants are police officers showing up at his door to force the issue.

“I hope owners like me will get the courtesy of a call,” Bullis said. “If I get a call telling me to close, I’m going to the circuit breaker and shutting off the power. It is what it is.”